ReThinking & Rebuilding Business?

by Jay Deragon on 01/02/2009

Cultures, by predisposition, both embrace and resist change, depending on culture traits. For example, the social web could play complementary roles in existing business cultures to those that embrace its dynamics.

On the other hand for those that resist the shift of power to the consumer the social web represents a very real threat.. Thus there are both dynamic influences that encourage acceptance of the social web, and controlling forces that resist what the social web threatens.

There are three kinds of influences that cause both change and resistance to the social web:

  1. forces at work within the social web.
  2. contact between the social web, businesses, media and society in general.
  3. changes in the “communications” environment which enable reach and influence.

Cultural change can come about due to the environment, to inventions, innovation, technology and contact with other cultures.

Cultural invention has come to mean any innovation that is new and found to be useful to a group of people and expressed in their behavior but which does not exist as a physical object (Sound like the social web?).

Will The Rate of Cultural Change Accelerate?

The study of the diffusion of innovation is a study of how, why, and at what rate new ideas and technology spread through cultures.

History, and the study of diffusion of innovation, has shown that advertised products or services were “innovations” in the culture. The general result of the studies discovered that the most influential channel of influence was not from some broadcast medium, but down an echelon of levels, from a small number of “early adopters” to a larger number of “secondary adopters“, and from them to “tertiary adopters“, then to “quaternary adopters“, etc.

Broadcast messages could reinforce the propagation from one adopter level down to the next, but lower levels are unlikely to respond until the level above them has adopted. It found that people were more likely to adopt, or even consider adopting, if people they know and respect have adopted. Imitation is the strongest influence channel. Therefore, the most effective marketing strategy is to first sell to the early adopters, then reinforce the diffusion to each successive level, but not to waste resources on trying to reach any given level before it is ready for it.

The speed of technology adoption which influences culture change is determined by two characteristics p, which is the speed at which adoption takes off, and q, the speed at which later growth occurs. A cheaper technology might have a higher p, for example, taking off more quickly, while a technology that has network effects (like social media and social networking) may have a higher q.

The Theory of diffusion of innovation distinguishes between “low-end disruption” which targets customers who do not need the full performance valued by customers at the high-end of the market and “new-market disruption” which targets customers who have needs that were previously un-served by existing means..”New market disruption” occurs when a product or service fits a new or emerging market segment that is not being served by existing incumbents in the industry. Sound familiar?

Markets, businesses and people adjust to disruption is three ways:

  1. Fighting it
  2. Adapting to it
  3. Accelerating it

Fighting culture changes is the behavior of those who have much invested in the old culture. Adapting to change is what human behavior does naturally. Accelerating culture change is either lead or the resulting dynamics of a natural phenomena. Ever heard of lead, follow or get out of the way?

Omair Haque writes: Rethinking and rebuilding business in a radically better mold is the fundamental challenge today’s boardrooms face. It is what the 21st century demands. Because as a confluence of crises tells us, tired, rusting, obsolete industrial era business as usual cannot go on.

Yet, making business better isn’t about responsibility, altruism, or justice – it is the single most significant strategic opportunity today’s boardrooms can seize. Google’s series of revolutions tell us that it is when we forget how business is and has been – and instead, focus on what business can be and should be – that we can rediscover and reignite new paths to advantage.

So where do the rest of us start? Here’s a single, simple question.

Where is the Chrome in your strategy? What shared resource have you invested in – or should you invest in – to expand the pie sustainably for everyone over the long-run?

If the answer’s “none,” it’s likely that you’re living on borrowed time. Because Chrome is a textbook example of asymmetrical competition. You don’t need to invest billions to disrupt industries with shared resources – a few million devoted to a handful of bright people will do. What Google did with Chrome, tomorrow’s revolutionaries will inevitably begin doing across industries – that’s why asymmetrical competition is so dangerous and so difficult to fight.

The faster things change– the more we adapt to acceleration – the less time we have to think about the other options. Perhaps the most ambitious hidden objectives of change are usually not stated or obvious rather simply natural. The faster the social web grows and creates widespread influence across global markets the more accelerated the potential disruptions become. Some say this will take ten years to realize the full impact of what we are witnessing while others don’t even recognize the changes happening around the them. It is easy to determine which category of adaption your business is in, just ask the people who want change.

What Say You?

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